Go to page

New Member

A month ago, a business associate gave me R5000.00 and I promised him to return it to him as R10 000.00 beginning of January, now we signed a contract and then it stipulated that I will pay R2500 extra if the money comes in later than 10 days. So the contract also stated that after the 10 days, he has the right to go file for a lawsuit and send me a debt summon and now he has contacted me today telling me that tomorrow he is going to file for a summon.

I made a few attempts to tell him that I will pay off his money by the end of the month, but he was adamant to stick to the contract, and so he refused and said he wants to use the law.

Now I don't know what to do because this is my 1st lawsuit, how will the letter be delivered to me? Will I be arrested or blacklisted? How does this whole summons and lawsuit process work?

Honorary Master

A month ago, a business associate gave me R5000.00 and I promised him to return it to him as R10 000.00 beginning of January, now we signed a contract and then it stipulated that I will pay R2500 extra if the money comes in later than 10 days. So the contract also stated that after the 10 days, he has the right to go file for a lawsuit and send me a debt summon and now he has contacted me today telling me that tomorrow he is going to file for a summon.

I made a few attempts to tell him that I will pay off his money by the end of the month, but he was adamant to stick to the contract, and so he refused and said he wants to use the law.

Now I don't know what to do because this is my 1st lawsuit, how will the letter be delivered to me? Will I be arrested or blacklisted? How does this whole summons and lawsuit process work?

I'm actually not even sure your contract would be legal between the in duplum rule (which should apply) and the maximum usury rate (which might apply only to credit providers). In any case, I don't see how a court would make you repay more than 10000.

You won't be arrested, won't go to jail, probably not even blacklisted.

You should receive the letter from the sheriff or by hand. The process is normally explained in the letter, you should have 14 calendar days to lodge a notice of opposition and to answer to his affidavit and a court date.

I would strongly advise to see a lawyer though as appearing alone in court (especially if he has a lawyer) is a terrible idea at the magistrate court. If he goes to the small claims court, you could get away with it as the magistrates are more lenient and more used to seeing people unqualified in law.

Neon Resident

Doubleplusgood

A month ago, a business associate gave me R5000.00 and I promised him to return it to him as R10 000.00 beginning of January, now we signed a contract and then it stipulated that I will pay R2500 extra if the money comes in later than 10 days. So the contract also stated that after the 10 days, he has the right to go file for a lawsuit and send me a debt summon and now he has contacted me today telling me that tomorrow he is going to file for a summon.

I made a few attempts to tell him that I will pay off his money by the end of the month, but he was adamant to stick to the contract, and so he refused and said he wants to use the law.

Now I don't know what to do because this is my 1st lawsuit, how will the letter be delivered to me? Will I be arrested or blacklisted? How does this whole summons and lawsuit process work?

You will not be arrested.
Blacklisted(Default) Maybe
Judgment Can be avoided.

Best way to deal with it is wait for small court claims or summons.
Attend the court case(or response back on summons) and request payment arrangement, the amount you have to pay is twice the loan amount after fees(R5000 x2).
If the amount is more then R10k, take him to ombudman and he will get in trouble.
If you keep up with payment you will avoid judgement, as for blacklisting(Will cost business guy money) it will clear as soon as you pay him and he has to remove it in 30 days after payment. If not, just dispute and send your proof of payment and court arrangement form and it will disappear as it never happened.
Note:
Since he is not registered with NCR, he cannot blacklist you!

Expert Member

Might have been really desperate. I learn my lesson with a Temporary loan FNB(13%) and after that just got a credit card.
My case my car broken down and I had no choice. People don't just borrow R8000. I needed R8000 and FNB offered R10000.
So I took the R10000 with R1300 initiation fee. The credit card and personal process take long first time. People do stupid things at desperate times.

But I agree that 100% interest rate is ridiculous and theft in my eyes.

New Member

Neon Resident

Might have been really desperate. I learn my lesson with a Temporary loan FNB(13%) and after that just got a credit card.
My case my car broken down and I had no choice. People don't just borrow R8000. I needed R8000 and FNB offered R10000.
So I took the R10000 with R1300 initiation fee. The credit card and personal process take long first time. People do stupid things at desperate times.

But I agree that 100% interest rate is ridiculous and theft in my eyes.

New Member

Honorary Master

Might have been really desperate. I learn my lesson with a Temporary loan FNB(13%) and after that just got a credit card.
My case my car broken down and I had no choice. People don't just borrow R8000. I needed R8000 and FNB offered R10000.
So I took the R10000 with R1300 initiation fee. The credit card and personal process take long first time. People do stupid things at desperate times.

But I agree that 100% interest rate is ridiculous and theft in my eyes.

Expert Member

If you were dumb enough to agree to such terms then he should have been smart enough to know you would not be able to afford to pay him back in time. If someone doesn't have R5000 now it's unlikely they will have R10000 soon after.

As an aside, you agreed with him in good faith to take the loan and make the repayment. He'll probably not get anywhere with this but I hope he does to teach you a lesson. Some may say that's nasty but only because so many people are borrowing money and screwing the lenders that it is just accepted as ok when it isn't. Don't borrow money if you can't make good on the terms.

Senior Member

As a personal loan, from an associate, there is zero chance of it affecting your credit rating and definitely will not get you blacklisted.
If it makes it to court, which is also unlikely, then there is a good chance that the court (especially small claims) will deem the terms extremely unfair and that the loan was made recklessly. The court will mediate and rework the terms to something that is more workable (maybe 25 - 50% interest) with a condition that it must be paid within a certain time limit.

You will not be arrested as this is not a criminal offence but rather a civil one. Relax, send the person you made the loan from an email stating that you want to work out something with him before he files a lawsuit (get everything on record) as it will show the court that you fully intended to make payment.

In duplum doesn’t require a registered credit supplier, in addition of being in the NCR, it is case law.

The usury maximum interest rate, I’m not sure of it at all but you could argue about it to get the court to reduce the interest rate at 30 something %. A court might even cancel the agreement actually.

But yes, send an email or sms to the lender as proof that you intend to repay him in order to show it to the court.

Honorary Master

*registered credit provider. And the worst that could happen is you two not liking each other anymore. SCC? Just tell them you'll pay him at the end of the month. In fact, his case won't even be on the roll by the time you've paid him back yet.

If he doesn't stop proceedings, at the court, hand him an invoice for R7500 for "loss of income" for you having to take time off to go to court :twisted: